BofA Securities analysts revised JetBlue Airways’ (NASDAQ:JBLU) rating, moving it from Neutral to Underperform and reducing the price target from $6.00 to $3.00. As a consequence, the stock plunged more than 10% today.

The analysts noted that following a 56% rise in JetBlue’s share price since early November, this downgrade is influenced by several factors. They pointed out the challenging domestic airline industry context, as discussed in their recent Year Ahead report. Additionally, they mentioned the ongoing GTF engine issues that are expected to affect growth and costs in 2024, potentially impeding JetBlue’s earnings recovery post-pandemic, with 2024 EBITDAR still projected to be 34% lower than in 2019.

Furthermore, the analysts highlighted additional execution risks linked to the pending judicial decision in JetBlue’s lawsuit with the Department of Justice regarding the acquisition of Spirit Airlines. In light of these factors, the price target has been adjusted downward.

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